#1
What is the law of demand?
As price decreases, quantity demanded increases
ExplanationInverse relationship between price and quantity demanded
#2
In economics, what does elasticity measure?
The responsiveness of quantity demanded to a change in price
ExplanationSensitivity of demand to price changes
#3
What is the Phillips Curve in economics?
A curve representing the relationship between inflation and unemployment
ExplanationInverse relationship between inflation and unemployment
#4
What is the difference between fiscal policy and monetary policy?
Fiscal policy involves government spending and taxation, while monetary policy involves the control of the money supply
ExplanationGovernment's tools for managing economy - spending/taxation vs. money supply
#5
What is the concept of inflation in economics?
A sustained increase in the general price level of goods and services in an economy
ExplanationRise in overall price levels over time
#6
What is the production function in economics?
A mathematical equation representing the relationship between inputs and outputs in production
ExplanationMathematical representation of production process
#7
What is the difference between explicit and implicit costs in production?
Explicit costs are direct money payments, while implicit costs are opportunity costs
ExplanationDirect payments vs. opportunity costs in production
#8
What is the opportunity cost of a decision?
The highest-valued alternative forgone
ExplanationValue of next best alternative foregone
#9
What is the difference between monopolistic competition and perfect competition?
Monopolistic competition involves differentiated products, while perfect competition involves identical products
ExplanationDifferentiated vs. identical products in markets
#10
What is the concept of externalities in production?
Positive or negative side effects of production that affect third parties
ExplanationEffects on third parties not accounted for in production costs
#11
What is the difference between absolute advantage and comparative advantage?
Absolute advantage refers to the ability to produce more with the same resources, while comparative advantage refers to the ability to produce at a lower opportunity cost
ExplanationAbility to produce more vs. produce at lower opportunity cost
#12
What does the law of diminishing marginal returns state?
As production increases, marginal returns decrease
ExplanationDecrease in additional output with each additional unit of input
#13
What is the Cobb-Douglas production function used for?
To model the relationship between inputs and outputs in production
ExplanationModeling production process with multiple inputs
#14
What is the concept of utility in economics?
The satisfaction or pleasure derived from consuming a good or service
ExplanationMeasure of satisfaction from consumption
#15
What role does the government play in a market economy?
To regulate and ensure fair competition
ExplanationRegulation for fair competition in markets
#16
What is the concept of a production possibility frontier (PPF) in economics?
A curve representing the maximum combination of goods and services an economy can produce given its resources
ExplanationBoundary of attainable production levels given resources
#17
What is the Tragedy of the Commons?
A situation where a shared resource is overused and depleted due to individual self-interest
ExplanationOveruse of shared resource leading to depletion